- Sales up significantly despite sharp differences among markets
- Product offensive continues
- Business picking up in Russia, India, and China
- Market conditions will remain challenging in 2013
The commercial vehicle sector is significantly affected by cyclical fluctuations. Nevertheless, its medium and long-term outlook is very promising. Daimler Trucks has prepared itself for fluctuating business cycles and as a result was able to demonstrate 2012 that solid results can be achieved in the commercial vehicle sector even when times are difficult.
Despite widely varying developments in its markets, Daimler Trucks was able to increase sales significantly this year. Unit sales through November for the division’s six brands — Mercedes-Benz, Fuso, Freightliner, Western Star, Thomas Built Buses, and BharatBenz — totaled approximately 424,000 vehicles (Jan.-Nov. 2011: 371,000). This result not only marked an increase of 14 percent from the figure recorded during the same period last year; it also means that sales after 11 months in 2012 were already at nearly the same level achieved for full-year 2011 (approx. 426,000 units).
“We can be satisfied with the development in 2012,” says Andreas Renschler, the Member of the Daimler Board of Management with responsibility for Daimler Trucks and Daimler Buses. “We achieved a substantial sales increase despite volatile markets. This shows that our global business model ‘Trucks for the World,’ is bearing fruit. Our increasing activity in very promising markets such as Russia, India, and China has put us in a good position to benefit better than ever before from the continually rising demand for commercial vehicles around the world.” Just a few days ago, Renschler was given a five-year contract extension, as a result of which he will remain the Daimler Board of Management Member responsible for Daimler Trucks and Daimler Buses until September 30, 2018.
The main pillars of growth for Daimler Trucks in 2012 were the markets in Asia and North America. Trucks NAFTA sold approximately 129,000 trucks through November, an increase of 21 percent compared with the same period last year. The increase was even bigger in Asia, where sales rose by nearly one-third through November, to 162,000 units (Jan.-Nov. 2011: 124,000). Fuso recorded an above-average sales increase in Japan, where sales rose by 35 percent to about 32,000 units.
The Brazilian market proved to be especially challenging in 2012, as an economic slowdown and the introduction of the new Euro V emission standard there at the beginning of the year led to a downturn in the commercial vehicle sector. A long period of uncertainty regarding financial incentives for capital goods also resulted in a sharp cutback in customer purchases. The Truck Division was unable to buck this trend, which is why the unit’s sales in Brazil fell 31 percent to just under 28,000 vehicles. The debt crisis in Europe also put a damper on sales. However, thanks to the model offensive led by the new Actros, Daimler Trucks was able to offset that negative development. As a result, sales of Mercedes-Benz trucks in Europe rose slightly from January through November, increasing by three percent compared with the same period of the prior year to nearly 76,000 units. Mercedes-Benz also performed well in Turkey, where sales rose by two percent to approximately 14,900 units through the first 11 months of the year.
The positive developments in Europe and Turkey enabled the division to nearly offset the market contraction in Brazil, but they could not prevent an overall six-percent decline in sales to 132,500 units for Trucks EU/LA from January through November (Jan.-Nov. 2011: 141,200).
Mercedes-Benz continued its truck product offensive in 2012. The new heavy-duty Actros proved in comparative tests that even the Euro VI variant consumes significantly less fuel than its predecessor. Later, in the fall, the new Antos truck for heavy-duty distribution transportation was presented to the public. The spring of 2013 will see the launch of the all-new Arocs truck for the construction sector. “The Actros, Antos, and Arocs are the tangible results of our heavy-duty truck platform, which is helping Daimler Trucks move forward with its module strategy,” says Renschler. “The goal of this strategy is to achieve as high a rate of shared components as possible worldwide, and thus generate synergies and economies of scale.”
Daimler Trucks isn’t just the benchmark when it comes to conventional drive systems. This fact was impressively demonstrated, for example, at the IAA Commercial Vehicles show, where the division presented the Fuso Canter Eco Hybrid to the European public. The new model’s fuel consumption is up to 23 percent lower than that of a comparable conventional Canter. Moreover, given the relatively moderate additional cost for the hybrid technology, the Canter Eco Hybrid can pay for itself in just three to four years, assuming normal annual mileage and operating conditions.
Daimler Trucks also made major advances with its activities in emerging markets in 2012. The division expanded the partnership it launched in Russia in 2008 with that country’s market leader for heavy-duty trucks, Kamaz. The two Russian joint ventures — Mercedes-Benz Trucks Vostok (MBTV) and Fuso Kamaz Trucks Rus (FKTR) — are gaining momentum. In November, Daimler and Kamaz signed an agreement to deliver engines and axles for trucks and buses produced by the Russian manufacturer. The contract calls for an initial supply of more than 7,000 engines and 15,000 axles per year. In the future, the two companies plan to manufacture axles in a joint venture. To this end, Daimler Trucks will set up and expand a component network in Russia. Last June, Daimler and Kamaz also signed a licensing agreement for the supply of Mercedes-Benz Axor cabs and the gradual localization of the related production activities. These cabs will be used in a new Kamaz truck generation that will be launched on the Russian market next year.
“Daimler Trucks is now benefiting from the partnership with Kamaz in three ways,” says Renschler. “First of all, our joint ventures with Kamaz for the production of Mercedes-Benz and Fuso trucks are establishing themselves on the Russian market. Secondly, we are selling components to our partner, and finally, we have a holding in the Russian market leader — a company that’s making huge technological progress, and therefore obtaining better sales opportunities, thanks to our components.” All together, Daimler Trucks recorded a sales increase in Russia of 34 percent to approximately 6,600 units during the first 11 months of the year.
In India, the world’s third-largest truck market, Daimler Trucks now has its own brand — BharatBenz.Daimler invested a total of €700 million in a new truck plant in Chennai, which commenced operations last April. Production there was launched with heavy-duty trucks; medium-duty models then followed in the fourth quarter. Chennai can currently manufacture 36,000 units per year, but plans call for that capacity to be expanded to more than 70,000 units. The Group’s Daimler India Commercial Vehicles (DICV) subsidiary will be launching a total of 17 truck models in the 7 to 49 ton GVW range between now and 2014. The vehicles will be especially designed to meet customers’ increasingly sophisticated requirements in India.
Daimler Trucks is pursuing a dual strategy on the Chinese market, where demand for premium Mercedes-Benz trucks is steadily rising. The brand with the star will likely sell more than 6,000 trucks in China before the year is out, which will set a new record for Mercedes there and bring Chinese sales more or less up to the same level as Mercedes-Benz truck sales in key European markets. Major growth opportunities also exist in China’s volume segment, which Daimler Trucks began serving at the beginning of July through its joint venture with Foton (Beijing Foton Daimler Automotive), and with the Auman truck brand.
The modern domestic truck segment, which includes the medium- and heavy-duty Auman trucks and the BharatBenz models, is rapidly expanding in many emerging markets. Experts believe this segment for high-quality, robust, but economical trucks will grow faster than any other in countries such as China and India over the next few years.
Daimler Trucks believes it has a good chance next year of building on the sales success achieved in 2012. This expectation is based on forecasts that the global truck market will expand slightly in 2013, and that Daimler Trucks will profit from its global scope as it seeks to gain additional market share. “However, we should not underestimate the risks the European debt crisis or government regulations pose to the demand for trucks,” Renschler says. Nevertheless, trucks will remain a growth sector over the medium and long term, and experts believe the market for trucks will expand at an average annual rate of three to four percent between now and 2020. According to Renschler, Daimler Trucks will grow above that average thanks to its global reach and its variety of brands. “We are the Number One manufacturer of medium and heavy duty trucks and we have everything in place to further strengthen this position,” says Renschler.